The Rhythm of Strategy

The Rhythm of Strategy: A Corporate Biography of the Salim Group of Indonesia

Marleen Dieleman
Copyright Date: 2007
Pages: 208
https://www.jstor.org/stable/j.ctt46mxx5
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  • Book Info
    The Rhythm of Strategy
    Book Description:

    This book provides a well-documented analysis of the strategy of the Salim Group, one of the largest family conglomerates in Southeast Asia. Using a multitude of sources, including interviews with the Salim family and Salim Group managers, the author provides a comprehensive corporate biography of this fascinating family firm. The Rhythm of Strategy: A Corporate Biography of the Salim Group of Indonesia criticises existing theories on ethnic Chinese firms and instead provides a more nuanced view of the evolution of a small migrant trading business into the largest family business group in Southeast Asia. It argues that the strategy of this group oscillated irregularly between a business model built on connections and a professional business model adapted to markets. Due to its size and closeness to the Suharto regime, the Salim Group has played an important role in shaping Indonesia's economy. This title is available in the OAPEN Library - http://www.oapen.org.

    eISBN: 978-90-485-0104-5
    Subjects: Sociology, Economics

Table of Contents

  1. Front Matter
    (pp. 1-4)
  2. Table of Contents
    (pp. 5-8)
  3. Preface
    (pp. 9-10)
    Marleen Dieleman
  4. List of Tables
    (pp. 11-11)
  5. List of Figures
    (pp. 12-14)
  6. 1 Introduction
    (pp. 15-38)

    Despite the fact that ethnic Chinese make up only a very small minority of the populations of most Southeast Asian countries, they tend to contribute a disproportionally large share to economic activity in the region. This phenomenon can be observed in countries such as the Philippines, Thailand, Malaysia, and most prominently in Indonesia. Many of the large businesses in Southeast Asia are started and managed by families of Chinese descent. The majority of these family empires are organised in a cluster of separate companies, hence the term business group.

    What is the difference between a family firm and a family...

  7. 2 The Birth of a Conglomerate
    (pp. 39-58)

    Companies are started and built by people, and the company that is the focus of this study was founded by a Chinese immigrant in Indonesia. The first section of this chapter takes us back to southern China, just after the start of the Sino-Japanese war in 1937. From there we follow the young founder of the group – Liem Sioe Liong – to the Dutch East Indies where he started his first small-scale trading activities.

    The struggle against colonialism and the establishment of the new nation state of Indonesia profoundly changed Liem’s chances. The young Liem took advantage of these...

  8. 3 The Midas Touch
    (pp. 59-82)

    In the previous chapter, the historical development of the Salim Group from its start by a Chinese immigrant in Central Java until its international expansion in the mid-1990s was described. The Salim Group developed from a small family business to the largest Indonesian conglomerate with operations abroad.

    In the following chapters, I will look more closely at the specific features of the Salim Group in the last decade (1994-2003), the focus of this study. The Asian Crisis, which started in mid-1997, had a major impact on the Salim Group. It changed its size, composition, business model and management. Therefore, I...

  9. 4 Fire-Fighting
    (pp. 83-104)

    The previous chapter described the growth of the Salim Group in the period 1994 to mid-1997. It argued that the group developed rapidly through new investments with partners, growth of existing business and acquisitions. Some of its important businesses were structured along the value chain by following a strategy of vertical integration. In addition a conscious strategy of intra-group co-ordination was carried out by the Salim family. The international division diversified and expanded through acquisitions. All this happened in a business context of high economic growth and government protection for well-connected conglomerates like the Salim Group.

    In the period covered...

  10. 5 Axis of Opportunity
    (pp. 105-120)

    In the previous chapter, the dark years of the Asian crisis were described in which the Salim Group survived the Asian Crisis crisis, if only barely. Leadership had been passed to Anthony Salim, who had to forfeit large parts of Salim’s empire in the process of coping with the political and economic crisis in Indonesia.

    In 2001, the group took its first steps on the bumpy road to recovery in the context of a modest Indonesian economic recovery and more impressive growth in the surrounding Asian economies. Although the economy showed positive growth figures, the Indonesian investment climate did not...

  11. 6 Evolution of the Salim Group Strategy
    (pp. 121-138)

    The previous four chapters described in detail the development of the Salim Group, in particular its strategy before, during, and after the Asian Crisis. Whereas, prior to the crisis, the Salim Group had shown a strong growth pattern and attempted to achieve synergy between the portfolio of diversified companies, during the crisis growth ceased and the group declined while it had to cope with an extremely hostile environment. It was only after the crisis that the Group began a policy of new investments, while modifying some minor aspects of its strategy and maintaining its domestically oriented, diversified strategy. In this...

  12. 7 Conclusions
    (pp. 139-150)

    Whereas in the previous chapter the evolution of the Salim Group within its context over 50 years was described, in this last chapter the evolution of the Salim Group strategy is linked to the theoretical approaches presented in chapter one. We look at the culturalist approach, the crony capitalism approach and the institutional theories on emerging market strategy. The chapter ends with conclusions and recommendations for further research.

    Some culturalist approaches suggest that ethnic Chinese firms are extremely flexible both in terms of adaptability to the environment¹ and in terms of their embedding in an international network rather than in...

  13. Annex 1 Sources
    (pp. 151-153)
  14. Annex 2 Time Series Analysis of Business Events
    (pp. 154-159)
  15. Annex 3 Overview of Salim Group Activities
    (pp. 160-164)
  16. Annex 4 Salim Group Executives
    (pp. 165-166)
  17. Notes
    (pp. 167-182)
  18. Glossary
    (pp. 183-183)
  19. Abbreviations
    (pp. 184-184)
  20. References
    (pp. 185-198)
  21. Index
    (pp. 199-205)